Auto Insurance 101By Chris Tolamalu
Auto insurance, as the term suggests, is insurance that you can purchase for your vehicle (cars, trucks, SUVs, motorcycles, etc.). It provides protection against losses incurred as a result of vehicle accidents. While the product seems simple, there are many different types of auto insurance policies available for purchase. Depending on the policy that you choose, your coverage levels and types will vary. Broadly speaking, these are the types of auto insurance programs on the market today:
• ‘Comprehensive coverage’ (Comp) – This kind of insurance insures your vehicle against the cost of purchasing a new vehicle if it is stolen or destroyed in a fire.
• ‘Collision coverage’ (Coll) – This kind of insurance insures your vehicle against the cost of repairing the vehicle following an accident or the cost of purchasing a new vehicle if it is damaged in an accident beyond economic repair.
• Personal Injury Protection (PIP) - This insures against the cost of medical expenses and lost wages related to the use, ownership or maintenance of a motor vehicle. This insurance is mandatory in some U.S. states.
• Medical Payments (MP) - insures against the cost of medical expenses for bodily injury sustained in an accident beyond any expenses that may be covered by PIP.
• Legal liability claims against the driver or owner of the vehicle following the vehicle causing damage or injury to a third party.
While ‘Liability insurance’ covers only legal liability, ‘comprehensive insurance’ covers PIP, MP, as well as legal liability. In the United States, liability insurance covers claims against the policyholder and any other operator of the insured’s vehicle. If, however, any other operators live at the same address, they must specifically be covered on the policy. For rented vehicles, most rental car companies offer insurance to cover damage to the rental vehicle.
While comprehensive insurance covers most aspects of damage which can affect the car itself or the driver, there is one risk associated with buying a new car is not covered even by comprehensive insurance – once the car is bought, there is a sharp decline in its value. During this period (immediately after a car is bought), in which the remaining car payments exceed the value of the vehicle and thus the compensation the insurer will pay for a ‘totaled’ (destroyed, or written-off) vehicle, customers may consider purchasing ‘GAP insurance’. GAP insurance was established in the early 1980's to provide protection to consumers based on buying and market trends.
Update: It's Still Ridiculously Expensive To Drive In Detroit
Nothing new here, just more evidence that's car insurance is sky high in the Motor City. According to some figures, Detroiters pay 165% more than the national average. Read more...
A Primer on Student Car Insurance Discounts
A good student discount can help lower your insurance premium and give college kids and teens an incentive to hit the books.
Insurers to demand more data via telematics to fine-tune insurance prices, says AXA CIO
AXA CIO Kevin Murray reveals how telematics devices, in-car and in-home, will increasingly help to set insurance premiums
Watch Ickey Woods bring back the Ickey Shuffle in Geico ad
Ickey Woods is back. And, more importantly, so is the Ickey Shuffle.
2 more insurance companies bank on multiple rate hikes
If your car insurance bill seems higher, just wait. Consumer investigator Jim Strickland has discovered two more big insurance companies are banking on multiple rate hikes. Strickland previously reported April and October increases for State Farm of 8 percent and 6 percent, respectively. A second open records request contained news Progessive had implemented smaller hikes last November and ...
Metromile Pitches Pay-as-You-Drive Auto Insurance
Greg Muender, a 27-year-old tech entrepreneur in San Diego, was constantly shopping for the best deal on car insurance. ?I probably switched carriers five times or more? over five years, he says. ?Insurance was a commodity to me.?
Geico punches the gas in Illinois
Geico, which last year overtook Allstate of Northbrook as the nation's second-largest auto insurer, grew auto insurance premiums by 17 percent in Illinois last year.
Insurers Keeping Drivers Happy Amid Rising Car Insurance Rates
Satisfaction with auto insurance has reached an all-time high, according to the latest J.D. Power survey.
TrueCar Now Serving Targeted Manufacturer Incentives To Customers Of Insurance Affinity Partners
SANTA MONICA, Calif., Aug. 21, 2014 /PRNewswire/ -- TrueCar, Inc. (TRUE), the negotiation-free car buying and selling platform, today announced that it has launched major enhancements to the auto buying programs for its insurance affinity partners, specifically the integration of exclusive incentives from automakers uniquely tailored to the needs of total-loss customers. Through the TrueCar ...
Study: Digital Display Ads Nine Times More Effective Than TV for Insurance Brands
The catchy jingles and memorable mascots we see on TV don?t seem to be what are attracting consumers to auto insurance companies these days. In fact, digital display ads are nine times more effective for insurance companies?especially car insurance brands?according to a study released today by Rocket Fuel . Rocket Fuel's study also found that insurance ads featuring human faces?a staple that ...